Cryptocurrency has quickly become a trend in the industry, with everyone investing in it. Out of the several online currencies, you can find on the market; Bitcoin is one of the most exchanged ones in this segment.
However, investing in Cryptocurrency requires a lot of planning since the prices keep fluctuating. This article will further tell you about the predictions made for Bitcoin in the year 2022 so that you can plan your investments accordingly.
Only last week, Bitcoin prices reached a new hike, topping off at $45,000. This was interesting to watch since it has been a while since Bitcoin saw such a rise. Dropping below $34,000 was the lowest this currency had seen since last July. While the recent surge is a good sign, it is still nothing compared to the all-time high Bitcoin hit last November, going over $68,000.
Although there is a considerable decline in Bitcoin prices, this does not really affect Bitcoin’s reputation as it is twice as valuable as it was a few years ago. This industry sees such ups and downs quite often, and for Bitcoin investors, it is not a matter of distress.
Research and studies done by experts say that this is quite a good time to invest in Bitcoin as it is on its way to passing the $100,000 mark. However, considering the volatility and recent declining price, there is not much agreement in the community of when that might happen.
Having said that, the volatility of such a currency is not new. This is also one of the main reasons why experts ask new investors to be extremely careful when allocating a segment of their portfolio to Cryptocurrency.
Much like some of the other well-known cryptocurrencies in the market, Bitcoin has also shown a steady increase in its value over the last few years. This is a promising sign, enough to make Bitcoin a safe investment. However, the rise has not yet come to a halt, and investors are rather curious about how high it can go.
Even though it is pretty tricky to predict Bitcoin’s future growth as it is more susceptible to market factors than some other asset classes, here is what experts have to say about it.
How did High Will Bitcoin’s Value get?
Till late last year, it was pretty evident that by the middle of this year, Bitcoin would have had reached the $100,000 mark. This prediction was mainly based on the fact that it reached an all-time high during November. However, since then, Bitcoin has seen a rather significant fall, making the prediction game harder.
While the most extreme skeptics of this industry think that Bitcoin will not do good this year and might even hit a low margin of $10,000, this will be the lowest Bitcoin has gone in a long time. However, the hopeful experts still think it is well on its way to hitting the $100,000 mark, but only slower.
With big-name companies such as Nike looking for a way to monetize their products in this digital assets market, experts are re-evaluating the market. The increase of metaverse worlds, games, experiences, and products has further increased the popularity of altcoins. This has further led to a change in the investors’ sentiments and interest in Bitcoin, which was known to be the original Cryptocurrency.
These subtle but significant changes in the market have left experts clueless. There is no concrete study about a number and date from the experts yet. Nevertheless, they are still inclined to believe that Bitcoin will show an increase in its value over time.
Investors should be expecting a substantial rise in the long-term value of Bitcoin. Their main argument to support this prediction is organic market movement. However, they also say the volatility of Bitcoin in recent times will mean little to no growth in the short term.
What Should Investors Know About Bitcoin Price Predictions?
Much like any other investment, all experts and financial planners are asking investors not to get too worked up about the price fluctuations yet. Several studies have shown how investors who contribute to ETFs and passive index funds generally perform better over time.
Based on the dollar-cost averaging strategy, experts are not recommending investing more than 5% of your entire portfolio in Cryptocurrency. They say you can only achieve long-term wealth with a diversified investment such as low-cost index funds. Crypto should make a very small part of your portfolio.
Since Cryptocurrency is still a new concept for the mass market to catch on to, it is an excellent decision to wait and check how it turns out. If you see a profitable market, you can invest your money, but you should not rush it just because everyone is doing it. There is only worth ten years of data yet for experts to base their price predictions. While most of the time it is about right, this year, Bitcoin’s volatile value has everyone confused.
Volatility often makes it harder to understand the ‘what’ and the ‘why’ in your crypto strategy. If this is your first time investing in crypto, you should keep in mind your purpose. Knowing why you are investing and what you want from this highly volatile market can help you focus better. You need to know your expectations and what you are planning to get from it when you are buying it.
Usually, market trends show that there is a fall after a significant rise. While people who have invested for the long-term are not really bothered by it, investors who are short-term users can incur a massive loss from it. This is why you should always set a practical goal before investing your money. Once you have reached that amount, you can pull back your money.
What Can Influence Bitcoin Price?
Usually, the value of Cryptocurrency can be affected by the same economic factors affecting other investments and currencies. This mainly includes the supply and demand chain, news cycle, public sentiment, scarcity, market event, and so on.
However, as an emerging asset, there are a few additional factors that can affect the price of Bitcoin more than any average security or currency. These mainly include:
Main Stream Adoption:
This is one of the main components that can increase and decrease the value of bitcoin. The rate at which new consumers and the generic market buys and explore this Cryptocurrency is directly proportional to its value.
It is not news that federal officers have started taking a keen interest in crypto in these last few months. Industry professionals have recently agreed that federal regulation can be one of the leading causes for Bitcoin’s lagging price.
Lastly, another considerable influence that can alter Bitcoin’s price is a cycle known as halving. Although it is pretty complicated in practice, halving is a step in Bitcoin mining that essentially cuts the rewards of mining Bitcoin transactions in half. This difference molds the rate at which new coins enter the market, having a direct impact on the value of the existing listings.
The crypto market can be quite a tough market if you are not focused. With the information mentioned in this article, you will be able to make a more informed decision and avoid making losses.